From: "Robert B.Z." <[EMAIL PROTECTED]> To: "e-gold Discussion" < Sent: Tuesday, October 14, 2003 9:19 PM Subject: [e-gold-list] Re: Income tax
> Hello George, > I have often wondered if it was possible to do away with inflation, all > taxes, etc. and simply replace them with a flexible GST (goods and > services tax). It is possible to do this, as Vanuatu has done (if you ignore the import tariffs). However, this is not what you propose. > The simplified version would look like this: > Every good and service is subject to a surcharge of say 5%, without > exemption. > Different to widely used VAT systems, there would be no way to claim the > GST back, instead, there would be double and tripple taxation in sor far, > that the raw material is taxed, the wages are taxed, the packaging is > taxed, the cost of transport to the wholesale, the sale to the retailer, > etc. > It would likely build up to about 30 or 40% anyway, but it would happen to > everyone, independent of income, property, background etc. > > Imagine the savings on paper work, enforcement, etc. There are very good reasons for avoiding the cascading effects of such taxes. Like the horrible distortion and the massive vertical integration that would follow. Income tax, as it operates now, can be greatly simplified by: 1. territorialisation --tax only income earned from the territory of the taxing authority 2. source orientation -- tax income at the first suitable opportunity and exempt it from any taxation and reporting after this 3. low flat rates 4. depersonalisation -- tax income assessable from property and business, without discimination among recipients. > > Now, the next stage, after introducing the system would be to set the > annual rate in accordance with the marco economic climate. If the economy > is overheating, increase the tax to 7 or 8%, shortly inflation will > increase as business passes the higher tax on to the consumer, consumers > buy less and start saving for the next low-tax year. Busines will drop the > prices to increase sales, growth is reduced and despite the higher tax, > the threat of deflation appears. Once that happens, the goverment reduces > the tax to 4% to kickstart things and everybody runs to buy the stuff > the've been saving for. > > Workable? Too simple? Not enough control over consumers? > > I don't know, you tell me :o) I'm afraid your macro-economics are as bad as your fiscal policy economics. It just does not work to stimulate the economy by fiscal policy, apart from structural reform of fiscal policy to reduce taxation and eliminate inefficient taxes and government programs (i.e. pretty much all of them). Japan has, in the last 15 years, clocked up an outstanding public debt of about 150% of a year's GDP, which is over twice that of the USA. And it made things worse, not better! New Zealand has been running a large surplus of about 3-4% GDP for the last few years but the economy keeps doing well. Germany and France are following Japan and getting the same results. --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
